Motilal Oswal's report on Shriram Transport Finance
Despite migration to 120dpd (15% of GNPA), management kept its focus on balance sheet strength. PCR declined to just 70% from 75% a quarter ago. Hence, provisioning was higher than estimate and led to in-line PAT.
Outlook
We cut our FY18-19 estimates by 6%/2% to factor in slower AUM growth and higher PCR. The stock trades at 1.9x/1.6x FY18/19E BV. BUY with a TP of INR 1,269 (2x FY19E BVPS).
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